Enzymatic carboxyl methylation of proteins is a post translational modification. By changing the structure and properties of membrane proteins, carboxyl methylation provides an important regulatory mechanism. Receptors and ion channel proteins being molecules that transmit information across the cell membrane are the obvious targets for regulating modification. The possible function of carboxyl methylation of membrane proteins was studied in neuroblastoma cell line NIE-115. These cells were found to be enriched in the enzyme protein carboxyl methylase (PCM). The enzyme is highly localized in the cytosol while its substrates, the methyl acceptor proteins are present mainly in the particulate fraction. These data suggest that PCM does function as a regulator of membrane bound proteins. Indeed, in the N1E-115 cells we found an increase in enzyme activity (two-fold) and a dramatic increase in methyl acceptor proteins (five-fold) as the cells undergo morphological and functional differentiation. The time course of this increase in carboxyl methylation paralleled the development of electrophysiological response of these cells. These data show a close relationship between the development of carboxyl methylation and membrane ion translocation, similar to our observation on methylation of the membrane bound acetylcholine receptor from Torpedo electric organ. Protein carboxyl methylation has been associated also with exocytotic release. The latter being dependent on depolarization of the cells' membrane and Ca++ ions movements. In the posterior pituitary lobe, exocytotic release of vasopressin, oxytocin and their corresponded neurophysins occur upon depolarization. We have studied carboxyl methylation of proteins in posterior pituitary lobes of Brattleboro rats with diabetes insipidus which lack vasopressin and vasopressin-neurophysin. In these rats methyl acceptor protein capacity was found to be 80% lower than in control rats while PCM activity is about 40% higher. The low methyl acceptor protein capacity is due to the low methylation of 11K daltons protein reflecting the absence of vasopressin-neurophysin which is a major substrate in the posterior pituitary. The increased enzyme activity can be attributed to the hyperactivity of the posterior pituitary of the Brattleboro rat. The data show the close relationship between the activity of posterior lobe and carboxyl methylation.